By the Freedom from Debt Coalition
20 Feb 2001:
Start of brainstorming meeting between CODE-NGO (C-N) and investment bankers
03 March:
C-N presents request for issuance of zero-coupon treasury notes to then finance-secretary
06 March:
C-N presents project to ‘a Monetary Board member’
09 March:
C-N sends letter-request to Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura
10 March:
C-N sends follow-up letter to BSP
12 March: C-N sends another follow-up letter to BSP
13 March:C-N presents project to National Treasurer Sergio Edeza
23 March: C-N sends letter-request to Secretary Romulo [then finance secretary] including request for a BIR [Bureau of Internal Revenue] ruling
30 March: C-N sends letter-request to BSP Governor Buenaventura
17 April: C-N formally appoints RCBC [Rizal Commercial Banking Corporation] Capital as exclusive issue manager, arranger and lead underwriter for resale of T-Notes to be acquired by C-N from the Bureau of Treasury
05 May: C-N requests BIR’s confirmation re: exemption of PEACe Bonds from capital gains tax
10 May: C-N sends another follow-up letter to BIR
25 May: C-N sends another follow-up letter to BIR
31 May: BIR Commissioner Rene Bañez issues BIR Ruling No. 020-2001
04 June: Commission on Audit Chairman Guillermo Carague gives verbal opinion to C-N
07 June: Monetary Board issues Resolution No. 878 approving C-N’s request for reserve eligibility
11 June: Jose Isidro Camacho assumes finance portfolio
13 June: Treasurer Edeza requests COA in a letter for assistance in formulating the necessary book entries for the proposed zero-coupon Treasury Bonds
14 June: BSP Deputy Governor Alberto Reyes notifies C-N in a letter of Resolution No. 878
20 June: COA issues written reply to Treasurer Edeza
12 July: Treasurer Edeza writes memo to Secretary Camacho questioning the legal personality of C-N to enter into negotiated purchase/sale of T-Notes as well as some aspects of BIR/Bañez Ruling of 31 May
17 July: RCBC offers to buy PhP15 billion of ten-year, zero-coupon T-Notes from the Bureau of Treasury for about PhP4.7 billion. The T-Notes will be resold as PEACe Bonds, the earnings from which will be used to finance anti-poverty projects and programs of NGOs. This will be the centerpiece of the President’s State of the Nation Address on 23 July
July/August: Secretary Camacho hosts a meeting between C-N and Treasury; he and his sister are present at the meeting
08 August: Treasurer Edeza writes BIR Commissioner Bañez for further clarification on his ruling of 31 May
09 August: C-N writes BSP Governor Buenaventura asking for expansion of reserve eligibility from PhP15 billion worth of PEACe Bonds to PhP35 billion
09 August: Monetary Board issues Resolution No. 1261 granting C-N’s request and quoting directly from C-N’s letter
10 August: Treasury recommends to the DoF that the government issue zero-coupon bonds as part of its regular financing program. Secretary Camacho approved this in his marginal note.
16 August: BIR Commissioner Bañez issues Ruling No. 035-2001 reaffirming his ruling of 31 May (No. 020-2001). Bañez further defines ‘at any one time’ to cover ‘only the origination or original issuance of the bonds regardless of whether sale or trading is made in the secondary market’.
03 September: Presidential full powers granted for zeros subject to 20 percent final withholding tax
04 September: The BSP receives a letter from Secretary Camacho informing them that C-N no longer wishes to make the PEACe Bonds eligible as alternative compliance under the Agri-Agra Law.
05 September: Secretary Camacho writes to the President requesting for permission to inhibit himself from having to make any decision, approve or sign the proposed debt issue of PEACe Bonds.
17 September: Monetary Board issues opinion on zeros subject to 20 percent final withholding tax.
26 September: Treasury announces an auction for 02 October 2001, of PhP3.5 billion worth of ten-year zero-coupon bonds, subject to 20 percent final withholding tax.
27 September: Monetary Board issues Resolution No. 1545 raising face value of PEACe Bonds to PhP50 billion from PhP35 billion.
28 September: Treasury postpones auction of ten-year coupon bonds to 11 October 2001
28 September: Presidential full powers granted to zeros not subject to 20 percent final withholding tax (transmitted to Department of Finance on 01 October 2001)
02 October: Treasury announces trial auction for zeros subject to 20 percent final withholding tax
03 October: Treasury holds general meeting with government securities eligible dealers (GSEDs) where tax treatment of zeros was discussed. GSEDs request postponement of 11 October; Treasury agrees.
05 October: Treasury holds trial auction for zeros subject to 20 percent final withholding tax. Revised electronic bidding system (to accommodate zeros) is tested at this trial auction.
01-07 October: Treasury asks its service provider to modify electronic bidding system to allow for exemption from 20 percent final withholding tax. Service provider says it needs 2-3 weeks in order to make the necessary adjustments.
08 October: BSP Deputy Governor Amando Tetangco Jr. writes to Finance Undersecretary Cornelio Grison notifying him of Monetary Board Resolution No. 1545 (27 September)
09 October: Treasury announces zero offering to GSEDs scheduled for 16 October. A 19-leader rule is announced as a requirement for exemption from 20 percent final withholding tax. Bidding will be manually done, by fax. Treasury cancels earlier announced auction of PhP3.5 billion of ten-year zero-coupon bonds subject to 20 percent final withholding tax.
12 October: Treasury issues memo to GSEDs announcing formula for determining purchase price and settlement amount of zeros to be auctioned on 16 October.
12 October: Treasury discusses tax feature with Bankers Association of the Philippines Government Securities Reform Committee.
15 October: Treasury issues additional memo notifying GSEDs of liquidity reserve eligibility
16 October: At 8 AM, Treasury begins accepting bids for ten-year zero-coupon
16 October: At 9.30 AM, Treasury issues clarificatory memo to GSEDs, citing excerpts of BIR ruling and Monetary Board resolution on tax exemption and reserve eligibility, respectively, of PEACe Bonds
23 October: A week after the auction, C-N tells its members it has the billion-plus peso endowment firmly in its possession
25 October: Monetary Board issues Resolution No. 1679 consolidating earlier Resolution Nos. 878 (07 June), 1261 (09 August), and 1545 (27 September), to take effect 18 October.
05 November: C-N applies to the Insurance Commission for eligibility of PEACe Bonds as security/statutory deposits of insurance companies, and as admitted assets for insurance company purposes.
16 November: Insurance Commission grants C-N its request.
November: Treasury instructs its service provider to modify electronic bidding system to enable zero-coupons to be not subject to 20 percent withholding tax.
